The growth in GDP at constant market prices was 5.7% and 6.3% in Quarter 1 (Q1) and Quarter 2 (Q2) of 2017-18 respectively.

The Indian economy slowed down in 2016-17, with the gross domestic product declining drastically from 8% in 2015-16 to 7.1% the next year, government said on Friday.

Finance minister Arun Jaitley said the slower economic growth reflected lower growth in the industry and the services sectors, due to a number of factors including structural, external, fiscal and monetary factors.

He said in the Lok Sabha that the lower rate of global economic growth in 2016, along with a reduction in gross fixed investment to GDP ratio, stressed balance sheets of the corporate sector, lower credit growth in industry sector were some of the reasons for the low growth rate in 2016-17.

“Slower growth in 2016-17 reflects lower growth in industry and services sector. Economic growth of a country depends on a number of factors including structural, external, fiscal and monetary factors,” he said during Question Hour.

As per the latest estimates from Central Statistics Office, the growth rate of Gross Domestic Product (GDP) at constant prices was 7.5%, 8.0% and 7.1% respectively in 2014-15, 2015-16 and 2016-17.

The growth in GDP at constant market prices was 5.7% and 6.3% in Quarter 1 (Q1) and Quarter 2 (Q2) of 2017-18 respectively.

Jaitley claimed that despite the slowdown, as per the IMF, India was the fastest growing major economy in 2016 and second fastest growing major economy in 2017 in the world.

He said the government has taken various initiatives to boost the growth of the economy, including a giving a fillip to manufacturing, concrete measures for transport and power sectors as well as other urban and rural infrastructure, comprehensive reforms in the foreign direct investment policy and special package for textile industry.

The minister said the government had also announced various measures in the 2017-18 budget to promote growth in which included a push to infrastructure development by giving infrastructure status to affordable housing, higher allocation to highway construction and focus on coastal connectivity.

“For highways development, the Bharatmala Pariyojana has been launched. The government has launched a phased programme for bank recapitalisation. This entails infusion of capital to the public sector banks, that is expected to encourage banks to enhance lending,” he said.

Jaitley said the Insolvency and Bankruptcy Code was enacted to achieve insolvency resolution in a time bound manner.

He said the other growth promotion measures included lower income tax for companies with annual turnover up to Rs 50 crore, further measures to improve the ease of doing business, and a major push to the digital economy.

Jaitley said as per information available from Reserve Bank of India, the gross bank credit (outstanding) for agriculture and allied sectors was Rs 9923.87 billion as of 2016-17 as against Rs 8829.42 billion as on 2015-16.

“The introduction of the Goods and Services Tax (GST) has provided a significant opportunity to improve growth momentum by reducing barriers to trade, business and related economic activities,” he added.